Sunday Property Round-Up, October 29th

Before I get stuck into the latest property news, just a quick note to congratulate the Construction Industry Federation (CIF) and their members on the most visible Safety Week to date.

In particular, well done to Collen Construction on their fantastic video series with Baz and his mammy! If you haven’t seen the videos yet, you can take a look here: http://ow.ly/3DQS30g7T1t #CIFsafety17

If you only have time for one broadsheet today, I recommend for property-related news that you pick up the Sunday Independent. It has the most comprehensive coverage of the big stories and some interesting construction articles, including an in-depth feature on the Designer Group.

Top stories

The story I, personally, have been waiting to hear for the last number of years appears on the front page (and continues on page 11) of the Sunday Business Post today that is ‘State to launch housing charity value-for-money investigation’ in the New Year. This comes after a “blistering attack“ on homeless charities this weekend by Conor Skehan, departing chairman of the government backed housing agency. It is not a popular position to hold, however, there are simply too many inept, non-professionals employed across a range of ‘sort of’ housing charities, which effectively turns this issue into an industry. One cynical way to look at this, is that the motivation is more to manage the crisis than to solve it. Regular readers can expect to hear more of this over the next few months and as we approach the New Year.

Political correspondent for the Sunday Independent, Philip Ryan, is coming under fire from the Standards in Public Office Commission (Sipo) to produce “personal information“ ahead of a hearing into alleged planning irregularities. Mr Ryan has been requested to produce information, however, this request has been rejected by his legal team on the basis of the journalist’s right to protect sources. He was also instructed to attend an investigation hearing into the planning claim last week, and it is understood that hearings will resume in private on December 1. The investigation relates to planning activities in Mayo County Council. Chief executive Peter Hynes, FH councillor Cyril Burke and Independent councillor Frank Durcan are being investigated for an alleged breach of strict rules around planning decisions made by local authorities. More to follow in December.

Tara Tower

It would not be our regular Sunday Property Round-up without contribution or commentary on Johnny Ronan’s Tara Tower. Liam Collins, writing in the Sunday Independent today, has a piece with the headline Johnny Ronan is Tara tower will cast a long shadow over the future of the city are planning to a wrecked a 22 story building in a derelict site at Tara Street could for ever change the Dublin skyline forever.’ Johnny Ronan’s battle with Dublin City Council has been going on, arguably, for as long as he has been developing in Dublin. In fact, this particular battle raises the question whether the same proposal, if presented by one of our ‘good boy’ developers, would be more palatable to DCC? What is confusing to people outside of the planning sphere, is that the local area plan has provided for this area to be regenerated and has stipulated that a landmark building of up to 22 stories in height would be appropriate here. DCC Appear to take the approach that this height and scale is not acceptable. In fact, deputy city planner Mary Conway maintained that “just because you could build a 22-storey structure didn’t mean you had to”.

The proposal put forward for the so-called Tara Tower is for an 80m structure which, if built, would be the tallest in the city, incorporating the train station, a new hotel and a 17-storey glass and stone tower topped off with a double height panorama restaurant. This would be a significant addition to the area which is at present largely derelict. The writer suggests that “Dublin is still navel-gazing about going up, rather than out“. Again, this begs the question about whether the controversy is surrounding the proposal or the proposer. Johnny Ronan, is described in this article as “probably the developer who came to epitomise the Celtic Tiger“ quoting that he has “genuine aspirations to leave behind a legacy of iconic buildings in Dublin, like the Convention Centre, which he developed“. We expect to know more by mid-November.

Commercial property

Commercial property commentary continues to deal with the fallout of the overnight tripling of stamp duty from 2% to 6%, however the finance bill allows the 2% rate to apply where binding contracts were in place before budget 2018 provided the instruments are executed before January 1, 2018.

Ronald Quinlan, commercial property editor, writes that ‘Ireland’s housing market set for dramatic transformation’ by the combination of new financial measures and changes to the planning system. He is referring to the latest ViewPoint report from agents CBRE, which welcomed positive changes introduced to the market, for example, the removal of the requirement for car parking and the lifting of height caps for certain developments along key transport routes in Ireland’s main cities and the establishment of a specific planning policy position for public transport corridors. Other positive initiatives include the introduction of new shared and build-to-rent accommodation models, Which is particularly relevant seeing the increase in renters over the last five years.

Donal Buckley writing in the SBP today notes how Dublin and Leinster properties make €18.6 million at auction. He is referring to Auctions held by Sherry Fitzgerald and Real Estate Alliance (REA).

Agents Knight Frank achieved “in the region of“ €2.5 million for a ready-to-go development site close to Saint James’ hospital campus in Kilmainham, Dublin 8

Women in construction

M&E Contracting firm the Designer Group has bought a US energy consultancy business as part of its plans for rapid global expansion To more than double group turnover from €160 million this year to €350 million by 2020. There is a business interview with the group CEO, Michael Stone, on page 6 of the business section of the Sunday Independent today. Giving his business lessons he makes the point that “young people nowadays are well educated and want quality employment. They are not just interested in money but also the social perspective.. All of these things are far more important to the generation behind me then to my own generation. It is very positive but our industry needs to realise that“. Also, when asked has the construction sector become a better place to work, he replies as follows “a shake up is still required. For example, we need to attract women into the industry. It’s disgraceful. There are very few women working in the industry. It is a daunting industry for women to work in but they bring an attention to quality and detail that is often better than in men. We want to bring more women into our business because it creates a much better dynamic. But there is not enough effort being made overall”.

Other property news

Colm McCarthy, writing in the Sunday Independent today, urges ‘Let’s stop spending too much money on vanity projects we don’t need: There’s welcome news of a return to capital spending – but we need to ditch the feast or famine approach’. Referring to the 3% rise in spending across all government programs on foot of budget 2018, he noted that capital spending next year will increase by 17%, with substantial increases thereafter.

He writes “It would be nice to think a measured increase in spending on well chosen priorities can – for once – replace the traditional splurge on politically expedient projects, followed by the shuddering halt when the money runs out”. Discussing the issue of spending balance between Dublin and the rest of the country, the writer points out the reality which is different to the political rhetoric, that is to say, the population in Dublin city and county has barely changed over the past half-century whereas the population in neighbouring county Kildare has increased 400% over the same period. He suggests “one way to avoid overheating and a new construction bubble is to exclude low priority schemes, in Dublin or anywhere else, from the new capital plan“.

Cork based developer Michael Flynn has spoken out about the cost of delays in planning applications and the effect of this, which is driving up prices of the scarce supply and the current market. Just last week, Dun Laoghaire Rathdown County Council granted permission to the developer for 240 new homes at Beech Park in Cabinteely, South Dublin. While he welcomed last week’s decision, he went on to say “unfortunately, time costs money, and it’s a pity though we have lost so much time here. We already have people interested in the housing, as well as industries in the area who are interested in renting the accommodation“.

The old Ferry Terminal at Dun Laoghaire is set to be transformed into a Canary Wharf style-hub for multinational companies as well as technology, design and marine-based enterprises that could support up to 1,000 jobs according to Dearbhail McDonald in the Sunday Independent today. This would make it the largest co-working space in Ireland and one of the largest in Europe.

In the money section today, there is the warning for property sellers to ensure that all outstanding charges that were introduced during the recession have been settled prior to trying to sell their property. One of the so-called stealth tax charges is the non-principal private residence charge of €200 which was first introduced in 2009 and later abolished in 2014 when it was replaced by the local property tax or LPT. Sellers need to provide receipt of payment prior to closing house sale. This also applies to LPT payments.

Ronan Lyons column this week deals with the report on the real cost of delivering new apartments, issued earlier this week by the Society of Chartered Surveyors of Ireland (SCSI). He describes the findings and the figures as unsurprising but concerning nonetheless. A two bed apartment in Dublin costs a minimum of €470,000 and can cost as much as €580,000 ex-VAT. This translates into buyers requiring a salary of at least €87,000 in order to qualify for a mortgage on even the most basic two-bed apartment. Some of the main cost culprits for developing apartments are parking and left issues. Of course, apartment blocks tend to be developed in areas that have a substantially higher site value than suburban or regional housing estates. We still seem to be a long way off rectifying this cost /viability issue for apartments in Ireland.

Lorcan Sirr writing in the Sunday times on the same issue adopts the approach that we forget new standards concentrate on providing new homes. His message this week on foot of the SCSI report is “less hype, more housing, please“.

In recent weeks, I wrote about property deals that have fallen through, particularly for social housing, after the government increased buy-in value of the so-called ‘Golden Visa’ or cash-for-Visa scheme that is ever popular with overseas investors. It now appears that there will be a review of the scheme in 2018.

Paul Horn formerly non-executive chairman of Marlet Property Group, which is one of Dublin’s largest property groups, has taken on the role of executive chairman. This role was previously held by Pat Crean.

In The Sunday Times today, Gavin Daly reports that Nama is set to end up €5 billion in the black, which is a marked increased from previous estimates. This is based on new analysis from stockbroker Davy.

‘Namaland: Lifting the lid on dealings of Ireland’s bad bank’ is a new book by journalist Frank Connolly, which chronicles the story of Nama. Writing in the SBP today, Frank Connolly talks about why he wrote the book and what it contains, including the culture of silence and insider trading.

Invesco Real Estate, the international property investment group behind the Frascati shopping centre, seeking permission to build 45 apartments on top of the upmarket shopping centre following its recent renovation scheme.

Niall Brady writes that “private investors cannot compete with the generous incentives that the not-for-profit sector is offering distressed mortgage borrowers to encourage them to swap home ownership for a lifetime tenancy, according to debt agency new beginnings”.

Nick Webb, in his ‘Inside Track’ column writes that former Trintech boss Cyril McGuire is planning a 26,500 sq. m office block at the entrance of South County Business Park in Leopardstown.

To keep up-to-date on all things tech and innovation for the planning, construction and property industries, head over to http://www.prop-tech.ie, the national resource website for innovators, investors and mentors.

We have no more free mentoring sessions for #proptech start-ups this month but the list for November and December is now open – after Christmas we will have dates in January, February and March before this CSR initiative ends, email news@prop-tech.ie for details.

Property Insiders Guide

Also, as regular readers will know, the Irish Property Buyers’ Handbook is being updated for 2018 and I would love to hear about any experiences in the market or new services, technology and trends for buyers. As always, you are welcome to email me with any industry news and updates at Carol@CarolTallon.com.